Medicare Supplement Insurance
Medicare has several parts: A, B, C, and D
Part A: Hospital Insurance
With few exceptions, this is free. It helps cover inpatient care in hospitals, as well as skilled nursing care, hospice, and home health care. However, it may not pay 100% of these costs.
To cover the difference, you might buy a Medicare insurance Supplement Plan, or Medigap policy. Same thing.
Part B: Medical Insurance
Part B covers doctors’ services, hospital outpatient care, home health care, and some preventive services to help support your health and to keep certain illnesses from getting worse.
Again, to cover the difference, you might buy a Supplement Plan (or Medigap policy).
Part C: Advantage Plans
These are insurance plans offered by private companies that are approved by Medicare.
An Advantage Plan offers all of your Part A and all of your Part B coverage. By law, Medicare Advantage Plans must cover all the services covered by Original Medicare, except hospice.
So what about hospice care? Original Medicare covers that, even if you have an Advantage Plan.
Are Medicare Advantage Plans supplemental coverage? No: see below.
Part D: Prescription Drug Coverage
This helps cover the cost of your prescription drugs. Part D is run by private insurance companies that are approved by Medicare. It may not cover the complete cost, but offers a very significant discount.
Advantage Plan or Supplement Plan?
You have two options.
When you turn 65 and go on to Medicare Part B, you come to a fork in the road. You get to choose one path:
1: If you choose an Advantage Plan (see “Part C” above), you are actually opting out of the Medicare System and choosing a private insurer. Depending on which company you choose, there may or may not be an annual fee, and coverages and co-pays will vary. See the chart.
2: It you choose a Supplement (or Medigap) Plan, you still get to choose a private insurer but, oddly enough, you are staying within the Medicare System. You will pay monthly installments on an annual fee – this varies according to the insurance company you choose – but zero co-pays. See the chart.
|ADVANTAGE PLANS||SUPPLEMENT (MEDIGAP) PLANS|
|Not Standardized.Benefits differ from one insurance company to another.||Standardized. All benefits are exactly the same.|
|Often free,although some charge a montly premium.These vary.||Always an annual premium,paid in monthly installments.These vary; generally higher than Advantage plans.|
|Charge co-pays and deductibles for doctor visit and procedures.||Plan vary.Some plans have no co-pays, no deductibles,no extra fees.|
|Servere travel restrictions: coverage in your service area only. If you traverl out of service area, you may be liable for 100% of any required medical expenses.||No travel restrictions. Good everywhere in the USA, and often to some degree also aboard.|
|Choose doctor only from limited list of approved providers. Mostly HMOs.||No limitations - choose any doctor who accept Medicare.|
|Different companies have different service areas.A company may operate in one state or country but not in another. You will need to find a new plan if you relocate.||No limited service areas-coverage is good throughout the USA. No problem with relocation.|
|Drug plan often included at no extra cost.||Drug plan not included, but available for an additional premium.|
|Different plans are available,depending on your need.|
When Should I Sign Up?
If you already receive Social Security and are nearing 65, you’ll get your Medicare card in the mail three months before your 65th birthday. If you wait until age 66 or later to apply for Social Security, you should apply for Medicare about three months prior.
When Can You Get Medicare?
Your Medicare card will arrive in an envelope from CMS (Centers for Medicare/Medicaid Services). It will have the effective dates of both Part A and Part B already filled in. Keep this – and any further information you receive from CMS – for future reference.
If you don’t want Part B, then follow the card’s instructions and send it back. Otherwise you will have to pay the Part B premium.
Can You Say No to Part B?
Yes. Let’s say you work for a business that has a good medical plan, and you don’t want to lose it after you turn 65. You may decide not to sign up for Part B quite yet. Check with HR to decide what’s best.
Later, when you leave the company, you can contact Social Security and ask for a new card, with your preferred start date for Part B. In most cases, this is the first day of the month after your company health benefits end.
You Get Six Months to Decide
Don’t Let This Time Slip By
From the time you go on Part B, you have only six months for the Open Enrollment Period. During this time you have the guaranteed right to:
1: enroll in any Medicare Advantage Plan available in your service area, or
2: buy any Medicare Supplement (Medigap) policy sold in your state.
You cannot be turned down for coverage during this time. But it only comes around once. When this six-month period is over, your option to buy a Supplement policy may be limited, it may cost you more, and you will probably have to pass medical tests to apply for one in the future.